Siac Construction Ltd and eight related companies, including the ultimate parent company in the 100-year-old giant construction group, have secured court protection to allow for preparation of a survival scheme.
The nine companies employ about 250 people full-time and are “in a clear position of insolvency” arising from the downturn and losses resulting from Siac’s involvement in Polish road-building projects, the High Court was told. The companies owe their lender banks some €42million, it was stated in the directors’ petition.
Since 2008, the turnover of Siac Construction Ltd (SCL) has fallen from €265 million to €113 million, the petition stated. SCL also has trade creditors of some €26.1 million, additional current liabilities of €4.5 million and other sums totalling some €24.7 million due in contract and rectificaiton provisions and intercompany liabilities. Polish creditors had outstanding claims of some €7.4 million.
Significant pressure
The directors said SCL is under significant pressure from its trade creditors and any petition for its winding up would have a "catastrophic domino effect" on the group as a whole.
The directors also outlined Siac has, with others, taken legal action in Poland arising from involvement in road contracts there, with the value of Siac’s share of those claims about €113 million.
The various Siac companies are involved in continuing and completed projects and are believed to have a reasonable prospect of survival, Lyndon MacCann SC, with Rossa Fanning, for the companies, said when presenting the petition.
Potential opportunities
Siac's share of various contracts was valued about €98 million and it anticipated further contracts valued at some €7 million would begin before Christmas, the petition stated. Its civil engineering division had also identified potential opportunities of more than €1.1 billion in various sectors of the Irish and UK markets.
Ms Justice Mary Finlay Geoghegan agreed to grant protection to SCL and the eight other companies on the basis of reports from independent accountants expressing the opinion the companies have a reasonable prospect of survival as a going concern provided several conditions are met, including securing creditor and court approval of survival proposals.
The judge stressed she was not making determinations at this stage as to whether the companies actually have a reasonable prospect of survival but she was satisfied there was evidence supporting that opinion. She also agreed to appoint Michael McAteer as interim examiner.
The judge said she had been told the companies’ lender banks were not opposing the petition for protection, moved by the board of directors of SCL.
When a sub-contractor creditor of the companies, Graham Sheehan of Sabre Electrical, asked the judge if he might say something, she told him he could outline what he wished to say. Mr Sheehan said he had "listened for months" to promises he would be paid and was to get a cheque last Friday. He also understood the client involved in Siac's M1 motorway project had paid Siac last week but Sabre had not been paid.
Siac had not been truthful with him and there was an issue whether the court could trust it, he added.
Protection
The judge stressed she was making no decision on the merits of the application other than to grant protection at this point. The directors had an obligation of full disclosure and all such matters would be addressed at the full hearing of the petition on November 6th, she said.
The judge directed the petition should be advertised in Ireland, England and Poland. The affected companies are Siac Construction Ltd; Siac Holdings Ltd; Siac Holdings (Ireland) Ltd; Siac Bituminous Products Ltd; Siac Butlers Steel Ltd; Lilymount Ltd; Siac (Clondalkin) Ltd; Siac Baldonnell Ltd and Siac Property Retailers Ltd.
